Tag: Consult
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How to value a project-based company
Some companies don’t sell products every day.They earn money project by project. Think of real estate developers, EPC contractors, infrastructure projects, etc. So valuing them is very different from valuing a normal operating business. When we value a project-based company, we usually focus on 3 key things: 1️⃣ BacklogsBacklogs represent projects already secured but not…
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Third opinion for an investment 🤔
Business valuation is not only for M&A. Sometimes, we are engaged as an independent third party to review a project investment decision. When a company plans to invest a large amount of money into a new project, management may already have an internal forecast.Our role is to step in and ask the uncomfortable but necessary…
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Cash projections that don’t look comfortable.
When we validate a company’s value using the Discounted Cash Flow (DCF) method,we usually forecast cash flows for the next 5 years. Sometimes, the projected cash balance looks… tight. This often happens because of things like: At first glance, it may look like the business “cannot survive”. This is where judgment matters. If: Then reviewing…
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M&A can take years.And sometimes… the deal dies before it starts.
There are many cases whereCompany A wants to buy Company B.Company B also wants to be bought. But the documents are nowhere near audit-ready. More than one set of accounting books.Numbers don’t reconcile.Key information depends on only one person. These are very common issues for small companies. So even if you’re not planning to sell…
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Why we usually need 3–5 years of historical performance in business valuation
Sometimes a company’s performance looks like a wave —up one year, down the next. This doesn’t always mean the business is unstable. It could be: Looking at several years helps us identify patterns, not just numbers. For example: Very often, we see cases where revenue remains strong, but net income drops sharply in certain years.When…
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Valuing a Business That Doesn’t Last Forever
A client recently asked us to value a business — but it will only last for another 20 years. This is common for concession-based businesses (e.g. utilities, infrastructure, mining, ports). Valuing these businesses is very different from valuing a “normal” operating company. In most valuations, we assume the business will operate forever (the going-concern assumption),…
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How do you do a valuation when the owner’s income is mixed with expenses?
“We own the company, we also manage it.So sometimes we get paid via dividends… sometimes via expenses.” When valuing family businesses, this is actually very common. Owner compensation is often mixed into: So the financial statements don’t always show the real operating cost of the business. As a consultant, what we usually do is ask…
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One of the small nightmares in business valuation: double-booked items.
This has never happened to me with listed companies that have strong audit processes. But with small companies?It doesn’t happen often — but when it does, it definitely slows things down. When we do a business valuation, we need to understand everything:revenue, costs, investments — basically how all the numbers in the financial statements connect.…
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“Why DCF looks clean on paper but is messy in real life”
Today I’m stuck in a DCF (Discounted Cash flow) model. Not because the formula is hard. But because I’m scrolling through hundreds of asset rows, checking purchase dates one by one, just to understand:– what was real CAPEX– what was replacement– and what should (or shouldn’t) be repeated in the forecast In theory, CAPEX is…
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“Does your business valuation reflect the actual performance after the M&A deal?”
A customer asked me this today. Short answer: No — we don’t usually go and check. The thing is a valuation isn’t a crystal ball.It doesn’t tell you exactly how the business will perform. What it does give you is a logic-based price range built from assumptions, scenarios, and the information available at that point…
ORNA Company Limited 